Hundreds of Thousands More Suffer Cuts to Unemployment Aid

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Common Dreams

Hundreds of Thousands More Suffer Cuts to Unemployment Aid

US contines to 'pull the rug out from under the unemployed'

by
Common Dreams staff

(Photo: AFP/Brendan Hoffman)

According to the National Employment Law Project (NELP), 230,000 more Americans in eight states suffered extreme cuts to federal unemployment benefits over the weekend. Now over 400,000 total people in 27 states have lost federal unemployment insurance due to Congressional cuts.

As unemployment rates remain near record highs, "A growing number of long-term unemployed workers are being left behind...Job openings are not taking the place of these cuts," said Christine Owens, executive director of the NELP.

More than 100,000 people lost benefits in California alone, which maintains one of the highest unemployment rates in the country.

More unemployment cuts lay ahead as another seven states will lose federal benefits by September bringing the total to 34 states facing reduced federal assistance.

If the other major federal unemployment insurance program – Emergency Unemployment Compensation – is allowed to expire at the end of this year, only a quarter of jobless Americans will be receiving unemployment insurance, according to NELP.

“We can’t pull the rug out from under the unemployed before the economy is fixed – and with 8.1 percent unemployment, we still have a long way to go,” Owens said.

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The Hill: Report says 230,000 unemployed losing benefits over weekend

A tier of 13 to 20 weeks of federal jobless benefits, used by the long-term unemployed, are expiring because of legislation Congress passed in February that gradually cuts federal benefits to 79 weeks from 99. That figure includes up to 26 weeks of state-level insurance. [...]

"These cuts are coming faster than the economy is improving, which means more workers will have to survive without any jobless assistance and families will have less money to put back into the economy,” Owens said.

Since August, the national unemployment rate has dropped to 8.1 percent from 9.1 percent, but most of that improvement is because discouraged workers have stopped looking for jobs.

There are still 16 states and the District of Columbia with rates above that national average in March, according to an April report from the Labor Department.

Even though rates have been dropping across the country, they are still historically high in some states.

Three states, California, Rhode Island (11.1%) and Nevada (12%), have double-digit levels of unemployment.

More than 100,000 will lose benefits in California, state officials have estimated.

By the end of September, another seven states will lose federal benefits, which will eventually bring the total to 34 states facing reduced federal assistance to the long-term unemployed.

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Think Progress: More Than 200,000 Americans Will Lose Their Unemployment Benefits This Weekend

These cuts are occurring because the formula under which states receive federal funds for extended unemployment benefits stipulates that those funds disappear if the state’s unemployment rate stops increasing. So because California and other states have seen some improvement in their labor situations, their funds vanish. “The Extended Benefits program is being phased out because state unemployment rates have stopped climbing, but unemployment is still exceedingly high in many places,” said NELP Executive Director Christine Owens.

There are still more than three job seekers for every available opening, according to the Economic Policy Institute, and more than 30 percent of the unemployed have been out of work for a year or more. Considering those numbers, it makes no sense to cut people off from unemployment benefits, which have ensured that millions of Americans don’t slip below the poverty line. According to the Government Accountability Office, 20 percent of those cut off from unemployment benefits by early 2010 fell into poverty.

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